Correlation Between Meiko Electronics and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Meiko Electronics and FAST RETAIL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Meiko Electronics and FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiko Electronics Co and FAST RETAIL ADR, you can compare the effects of market volatilities on Meiko Electronics and FAST RETAIL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Meiko Electronics with a short position of FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiko Electronics and FAST RETAIL.
Diversification Opportunities for Meiko Electronics and FAST RETAIL
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Meiko and FAST is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Meiko Electronics Co and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR and Meiko Electronics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Meiko Electronics Co are associated (or correlated) with FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Meiko Electronics i.e., Meiko Electronics and FAST RETAIL go up and down completely randomly.
Pair Corralation between Meiko Electronics and FAST RETAIL
Assuming the 90 days horizon Meiko Electronics Co is expected to generate 1.46 times more return on investment than FAST RETAIL. However, Meiko Electronics is 1.46 times more volatile than FAST RETAIL ADR. It trades about 0.25 of its potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.35 per unit of risk. If you would invest 4,940 in Meiko Electronics Co on September 13, 2024 and sell it today you would earn a total of 610.00 from holding Meiko Electronics Co or generate 12.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiko Electronics Co vs. FAST RETAIL ADR
Performance |
| Timeline |
| Meiko Electronics |
| FAST RETAIL ADR |
Meiko Electronics and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiko Electronics and FAST RETAIL
The main advantage of trading using opposite Meiko Electronics and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiko Electronics position performs unexpectedly, FAST RETAIL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Meiko Electronics vs. Benchmark Electronics | Meiko Electronics vs. Superior Plus Corp | Meiko Electronics vs. SIVERS SEMICONDUCTORS AB | Meiko Electronics vs. Norsk Hydro ASA |
| FAST RETAIL vs. CCC SA | FAST RETAIL vs. AOYAMA TRADING | FAST RETAIL vs. Superior Plus Corp | FAST RETAIL vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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